Both the implementation of the tariffs and the retaliation response will have unequal credit effects in the sectors and economies, warns the risk classification agency
New York – a Moody’s estimates that 3 trillions of dollars of global commercial flow are at risk Tariff attack the president of United States, Donald Trumpto commercial partners like European Union, Mexico, Canada AND China. Both the implementation of the rates and the retaliation responses will have unequal credit effects in the sectors and economies, warns the risk classification agency in a report published on Tuesday 4.
“The volume of exchanges – $ 3 trillions of goods flows – and interconnections of the supply chain, in particular for strategic sectors such as cars, technology and production, mean that the effects would even be wider than direct trade data suggest,” says Moody’s in the document.
According to the rating agency, the effects of the tariffs from the credit point of view can occur from various channels on the economic sectors, which influence importers, exporters, retailers and accusations. “The rates act as an import fee and change the demand for the power supply of goods not to feed and, consequently, the export sectors for national producers,” he says.
For governments, rates represent a mixed set of impacts, according to Moody’s. On the one hand, the adoption of additional commercial rates increases the revenues for the country that imposes them, but, on the other, they weigh on economic growth by depressing consumption and production. “Therefore, we hope that the rates will be, in clear terms, negative for the total government’s revenue, since the macroeconomic effects are taken into consideration,” says Moody.
The classification also estimates that the rates would have a lower material impact for countries with less commercial opening, such as the United States, but it could be very significant for economies dependent on trade such as Mexico and Canada. In the case of Mexico, the imposition of the US rates would probably lead to the demort of the currency, with a transfer effect on inflation, limiting the space for monetary flexibility in an already weakened economic growth environment. “The close commercial ties between us and Mexico amplify the tariff effects,” says Moody.
